Secretary of State for Environment Food and Rural Affairs, Steve Reed, has announced a series of initial steps towards ending the crisis in the water sector.
As Ofwat publishes its draft responses on water company spending, the new measures represent a step change after years of failure to ensure the water industry cuts illegal sewage dumping and attracts major private-sector investment to upgrade infrastructure while prioritising the interests of customers and the environment.
Yesterday the Secretary of State also met with water company Chief Executives to make clear that under this government water companies will be answerable for their performance to customers and the environment. He set out his plans to work in partnership with the sector and investors to attract investment, jobs, and clean up the nation’s polluted waterways.
It is anticipated that water bills in England and Wales will rise by an average of £94 over the next five years – a third less than the increases requested by companies – under plans set out by the regulator. Water companies say the additional money is needed to stop sewage spills and fix leaky pipes.
The Liberal Democrats’ environment spokesperson, Tim Farron, said, “Any insulting price hikes by water companies must be blocked. It is a national scandal that these disgraced firms are demanding more money from families and pensioners in a cost of living crisis, all while dumping raw sewage into our rivers.”
The Environment Secretary has written to Ofwat to ask them to make sure funding for vital infrastructure investment is ringfenced and can only be spent on upgrades benefiting customers and the environment. Reed also wants Ofwat to ensure that when money for investment is not spent, companies refund customers, with money never allowed to be diverted for bonuses, dividends or salary increases.
Reed says that he expects companies to change their ‘Articles of Association’ – the rules governing each company – to make the interests of customers and the environment a primary objective.
Consumers will also gain new powers to hold water company bosses to account through powerful new customer panels. For the first time in history, customers will have the power to summon board members and hold water executives to account.
Reed said, “We will never look the other way while water companies pump sewage into our rivers, lakes and seas. This unacceptable destruction of our waterways should never have been allowed, but change has now begun so it can never happen again.
“I have announced significant steps to clean up the water industry to cut sewage pollution, protect customers and attract investment to upgrade its crumbling infrastructure. That change will take time. Over the coming weeks and months, this government will outline further steps to reform the water sector and restore our rivers, lakes and seas to good health.”
These steps sit alongside the Labour’s manifesto commitments to put failing water companies under tough special measures to clean up our waterways.
Alan Lovell, Chair of the Environment Agency, said, “This is a significant step forward in delivering the investment needed to protect rivers and seas, boost water supplies and improve resilience to flooding. It will deliver four times more investment in clean and plentiful water than the previous five-year period.
“The critical issue now is delivery. We will be playing our part to make sure the industry steps up on the environment. We are taking forward our biggest ever transformation in the way we regulate, recruiting up to 500 additional staff, increasing compliance checks and quadrupling the number of water company inspections by March next year. Our job is to make sure the water companies do what they say they will do, and people begin to see a difference in their water environment.”
Tessa Wardley, Director of Communications & Advocacy at The Rivers Trust said, “Today could represent a much-needed turning point for the water industry, but it is one step in a longer journey. It is good to see our new Environment Secretary directing his department to prioritise water and pushing Ofwat on tighter regulation. Our water environment desperately needs investment and we the public need stronger controls and regulation of polluters. Measures announced today such as required changes in water companies’ articles of association and the formation of new customer panels could represent a really important step in ensuring they are delivering for both people and the environment.
“At a time when lots of people are still feeling the financial pinch, The Rivers Trust is pushing for more transparency and collaboration around the whole system as we look into the details of what the rise in bills and investment announced this morning will actually mean for our environment. We will also continue to push for more use of nature alongside chemicals and concrete to deliver solutions that don’t break the bank and respect the bills that we, as customers, are being asked to pay.
“We remain committed to working collaboratively throughout catchments, making sure solutions include landowners and highways and we welcome the government’s support in that.”